The Importance of Workforce Housing: A Case Study on Fruitland Meadow

Janine Namgung
Oct 21
2 min read

Updated: Dec 2

Every community depends on its workforce — teachers, nurses, first responders, and service professionals. Yet, for many, finding a quality home near their workplace has become nearly impossible.

Our Recent Acquisition: Fruitland Meadow

Earlier this month, we acquired Fruitland Meadow in partnership with Enterprise Community Investment, Inc.. This 168-unit community, located in Salem, OR, was built in 2018. This acquisition preserves affordable homes for families and individuals earning up to 80% of Area Median Income (AMI) in Marion County.

Key Factors for Our Success

Our success in this transaction relied on three key factors:

Aligned Capital: We partnered with a collaborative partner that has a discretionary fund focused on preserving workforce housing nationwide.
Strong Local Partnership: We collaborated with the Salem Housing Authority to extend a 100% tax abatement. This ensures the property continues serving 80% AMI residents.
Compelling Economics: We acquired the property at over a 20% discount to its estimated replacement cost.

That last point underscores the challenge we aim to tackle: while demand for workforce housing is undeniable, new projects are tough to pencil.

The Challenge of Workforce Housing Development

Construction costs have risen faster than rents. Additionally, suitably zoned, level, infrastructure-ready sites are increasingly scarce. The result? Project costs often approximate project values, leaving little incentive for private capital to add new workforce units.

Fruitland Meadow exemplifies this conundrum: it was purchased below replacement cost while still achieving current 80% AMI rents.

A Scalable Solution

We believe a scalable solution is within reach. Our analysis shows that if we can reduce as-built costs by 10–15% (depending on location), new projects can become financially viable for private capital — without sacrificing quality or amenities.

We’re seeing interest from capital sources with long-term investment horizons, such as family offices, especially in undersupplied markets where population growth is expected to outpace national trends.

Collaborative Efforts for Change

This solution is varied and complex. We are currently working with municipalities on financial and policy concessions. At the same time, we are partnering with general contractors and subcontractors to unlock efficiencies through scale, replication, and design.

Our goal is to both preserve existing workforce housing and develop new 80% AMI communities across key western MSAs. This will help keep essential workers close to the communities they serve.

The Road Ahead

We’ve made progress, but there’s much work ahead. How do you think we can accelerate workforce housing solutions nationwide? We’d love to hear your ideas below.

Conclusion

Workforce housing is essential for the stability and growth of our communities. By focusing on innovative solutions and partnerships, we can create a sustainable future for those who serve us every day.